Kempthorne: Polar Bear 'Threatened' By Decline of Arctic Sea Ice, But Drilling Can Continue

Posted by Wonk Room Thu, 15 May 2008 12:16:00 GMT

Originally posted at the Wonk Room.

After years of delay, Secretary of the Interior Dirk Kempthorne made a landmark decision on whether global warming pollution is regulated by the Endangered Species Act (ESA). Kempthorne ruled that the polar bear should be classified as a “threatened species” due to the decline of polar sea ice, critical to its survival. Kempthorne stated:

They are likely to become endangered in the near future.

The Department of Interior, under Secretary Dirk Kempthorne, fought for several years in the courts since 2005 to avoid making a decision on whether the precipitous decline in Arctic sea ice due to global warming is making the polar bear an endangered species. Fish and Wildlife Service director Dale Hall testified in January that there was no significant scientific uncertainty in the endangerment posed by global warming to polar bears—the only legal justification under the Endangered Species Act for a delay.

Kempthone’s decision to follow the science is in marked contrast to Environmental Protection Agency Administrator Stephen Johnson’s action to override his staff in refusing to regulate tailpipe greenhouse gas emissions.

However, Kempthorne also argued vigorously that his decison does not compel the Bush administration to construct a plan to regulate greenhouse gas emissions, repeating President Bush’s entirely spurious claim that would be a “wholly inappropriate use” of the Endangered Species Act. The Interior news release announces, “Rule will allow continuation of vital energy production in Alaska.” Kempthorne claimed that the Marine Mammal Protection Act (MMPA) is “more stringent” than the ESA, despite the court ruling that compelled him to make today’s ruling stating that “the protections afforded under the ESA far surpass those provided by the MMPA.”

Despite his protestations, Kempthorne’s decision clearly calls into question the legality of the sale of oil and gas drilling rights in polar bear habitat on February 6, while the polar bear decision was being illegally delayed.

Kempthorne complained that the Endangered Species Act is “one of the most inflexible” pieces of legislation because it didn’t allow him to consider economic impacts when protecting species like the polar bear from extinction.

From the Department of Interior press release on the 368-page rule:
To make sure the ESA is not misused to regulate global climate change, Kempthorne promised the following actions:
  • The U.S. Fish and Wildlife Service is proposing a 4(d) rule that states that if an activity is permissible under the stricter standards of the Marine Mammal Protection Act, it is also permissible under the ESA with respect to the polar bear. This rule, effective immediately, will ensure the protection of the bear while allowing us to continue to develop our natural resources in the arctic region in an environmentally sound way.
  • Director Hall will issue guidance to staff that the best scientific data available today cannot make a causal connection between harm to listed species or their habitats and greenhouse gas emissions from a specific facility, or resource development project or government action.
  • The Department will issue a Solicitor’s Opinion further clarifying these points.
  • The Department will propose common sense modifications to the existing ESA regulatory language to prevent abuse of this listing to erect a back-door climate policy outside our normal system of political accountability.

Andy Revkin at Dot Earth concludes, “So this leaves everything as it was, in a way, with the bears facing a transforming ecosystem and environmentalists successful in their litigation, but not necessarily empowered by the listing.” At Climate Progress Joe Romm calls the decision “bye-polar disorder.”

Sierra Club spokesman Josh Dorner tells the Wonk Room, “This is the regulatory equivalent of a signing statement—only this one gets to be challenged in court.”

Senate Passes Ensign-Cantwell PTC Extension 88-8 1

Posted by Wonk Room Fri, 11 Apr 2008 13:53:00 GMT

Yesterday morning, the Senate passed the Ensign-Cantwell clean energy package (S.Amdt 4419) by a vote of 88-8. The package is attached to Sen. Chris Dodd’s (D-Conn.) Foreclosure Prevention Act (S. Amdt 4387 to H.R. 3221), which was approved 84-12.

The future of the energy package now depends on whether the House is willing to consider it a “stimulus” that merits deficit spending.

The eight senators in opposition were Sens. Alexander (R-Tenn.), Bunning (R-Ky.), Byrd (D-W.Va.), Carper (D-Del.), Dodd (D-Conn.), Kyl (R-Ariz.), Sessions (R-Ala.), and Voinovich (R-Ohio). Alexander and Kyl’s alternate version of the package (S. Amdt 4429), which would have extended credits by another year and lowered the wind production credit, died by a 15-79 vote. Dodd had vigorously argued that the renewable tax package was not germane to his housing bill.

Not voting were the three presidential candidates and Sen. Liddy Dole (R-S.C.).

New Senate Renewable Tax Package Possible Today

Posted by Brad Johnson Wed, 02 Apr 2008 19:56:00 GMT

According to a report in CQ Tuesday, the Senate deadlock on the renewable tax-credit package may have broken, led by efforts by Sen. Maria Cantwell (D-Wash.) and John Ensign (R-Nev.). Ensign told reporters he expects “a big announcement” on Thursday.

Details of the renewable incentives have been released, but not the full package, including revenue provisions (that is, is oil company tax breaks will be rolled back) and other elements that have been in previous iterations, such as benefits for the coal industry.

A summary:
  • The renewable energy production tax credit (PTC) is extended one year to 2009 and modified to include tidal power
  • The solar and fuel cell investment tax credit (ITC) is extended 8 years to 2016
  • The residential energy-efficient property credit is extended one year to 2009, and the $2,000 cap is removed
  • Clean Renewable Energy Bonds (CREBs) are extended one year to 2009, with an additional $400 million authorized
  • The 10% ITC for energy-efficiency improvements to existing homes is extended one year to 2009
  • The contractor tax credit for energy-efficient new homes is extended two years to 2010
  • The energy-efficient commercial buildings deduction is extended one year to 2009 and increases the $1.80/sqft max to $2.25/sqft
  • The energy-efficient appliance credit is extended to 2010

The full language explaining the incentives is after the jump.

Richard Rubin and Kerry Young report in CQ:
The Senate’s deadlock over tax breaks for renewable energy may be ending.

Sen. John Ensign, R-Nev., said negotiators have made progress, and he expects a “big announcement” Thursday.

Ensign and Sen. Maria Cantwell, D-Wash., have been working on a package of tax incentives, including extensions of credits for producing electricity from wind and sunlight.

Senate Finance Chairman Max Baucus, D-Mont., also sounded upbeat.

“There is a very good chance, compared to before we broke for the break, that we are going to get a significant extenders package paid for,” Baucus said. “We’re working with both sides to get that done.”

Energy tax packages have failed repeatedly on the Senate floor, including a $22 billion version that fell one vote short of winning approval as an amendment to a broader energy bill (PL 110-140) in December.

Republicans have complained about the revenue-raising offsets in the Democratic proposals, which would hit the oil and gas industry. It’s unclear how any Cantwell-Ensign proposal would overcome that hurdle.

Industry sources were encouraged but cautious Tuesday, and they continue to worry about losing tax benefits that are scheduled to expire Dec. 31.

“It’s all about urgency,” said Greg Wetstone of the American Wind Energy Association. “We’re looking at an industry that’s been on a phenomenal growth path that is threatened now with tremendous policy uncertainty.”

Description of clean energy and energy effiency incentives in the Cantwell-Ensign package:
Purpose: To provide for the limited continuation of clean energy production incentives and incentives to improve energy efficiency in order to prevent a downturn in these sectors that would result from a lapse in the tax law.

Title I – Extension of Clean Energy Production Incentives

Section 101. Extension and modification of the renewable energy production tax credit (IRC Section 45). Under current law, an income tax credit is allowed for the production of electricity using renewable energy resources, like wind, biomass, geothermal, small irrigation power, landfill gas, trash combustion, and hydropower facilities. A taxpayer may generally claim a credit for 10 years, beginning on the date the qualified facility is placed in service. In order to qualify, however, facilities must be placed in service by December 31, 2008.

The bill extends the placed in service date for one year (through December 31, 2009). It also redefines small irrigation power to include marine and hydrokinetic energy, and enables the credit to help reduce the cost of renewable electricity that is ultimately sold to utility customers when the utility itself is also a part owner of the renewable facility.

Section 102. Extension and modification of the solar energy and fuel cell investment tax credit (“ITC”) (IRC Section 48). Under current law, taxpayers can claim a 30 percent business energy credit for purchases of qualified solar energy property and qualified fuel cell power plants. In addition, a 10 percent credit for purchase of qualifying stationary microturbine power plants is available. The credit for qualified fuel cell power plant property is capped at $500 per 0.5 kilowatt of capacity. Credits apply to periods after December 31, 2005 and before January 1, 2008.

The bill enables taxpayers to claim the 30 percent business credit for the purchase of fuel cell power plants and solar energy property and the 10 percent credit for stationary microturbines, through December 31, 2016. In addition, the bill repeals the $500 per .5 kilowatt of capacity cap for qualified fuel cell power plant property, and allows electric utilities to claim the ITC.

Section 103. Extension and modification of the residential energy-efficient property credit (IRC Section 25D). Under current law, taxpayers can claim a personal tax credit for the purchase of property that uses solar energy to generate electricity for use in a dwelling unit and qualified solar water heating property that is used exclusively for purposes other than heating swimming pools and hot tubs. The credit is equal to 30 percent of qualifying expenditures, with a maximum $2,000 credit for each of these systems of property. Section 25D also provides a 30 percent credit for the purchase of qualified fuel cell power plants. The credit for any fuel cell may not exceed $500 for each 0.5 kilowatt of capacity. The credit applies to property placed in service prior to January 1, 2009.

The bill extends the credit for residential solar property for one year (through December 31, 2009) and repeals the $2,000 credit cap for qualified solar electric property. The bill also allows the tax credit to offset Alternative Minimum Tax (“AMT”) liability.

Section 104. Clean Renewable Energy Bonds (“CREBs”) (IRC Section 54). Under current law, public power and consumer-owned utilities that cannot benefit from tax credits can issue Clean Renewable Energy Bonds (CREBs) to help them reduce the cost of renewable energy investments. Under current law, there is a national CREB limitation of $1.2 billion in bonding authority and CREBs must be issued before December 31, 2008.

This bill authorizes an additional $400 million of CREBs that may be issued and extends the authority to issue such bonds through December 31, 2009. In addition, the bill allocates 1/3 of the additional bonds for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives.

Section 105. Extension of the special rule to implement FERC restructuring policy (IRC section 451(i)).

The bill extends through December 31, 2009, the present-law deferral provision that enables qualified electric utilities to recognize gain from certain transmission transactions over an 8-year period.

Title II – Extension of Incentives to Improve Energy Efficiency

Section 201. Extension and modification of the credit for energy-efficiency improvements to existing homes (IRC section 25C). Current law provides a 10 percent investment tax credit for purchases of advanced main air circulating fans, natural gas, propane, or oil furnaces or hot water boilers, windows and other qualified energy-efficient property. The credit applies to property placed in service prior to January 1, 2008.

The bill extends the credit for one year (through December 31, 2009), and specifies that certain pellet stoves are included as qualified energy-efficient building property.

Section 202. Extension of the tax credit for energy-efficient new homes (IRC section 45L). Current law provides a tax credit to an eligible contractor equal to the aggregate adjusted bases of all energy-efficiency property installed in a qualified new energy-efficient home during construction.

The bill extends the energy-efficient new homes credit for two years (through December 31, 2010), and permits the eligible contractor to claim the credit on a home built for personal use as a residence.

Section 203. Extension of the energy-efficient commercial buildings deduction (IRC section 179D). Current law allows taxpayers to deduct the cost of installing energy-efficient improvements in a commercial building. The deduction equals the cost of energy-efficient property installed during construction, with a maximum deduction of $1.80 per square foot of the building. In addition, a partial deduction of 60 cents per square foot applies to certain subsystems. The deduction applies to property placed in service prior to January 1, 2009.

The bill extends the deduction to property placed in service through December 31, 2009, increases the maximum deduction to $2.25 per square foot, and allows a partial deduction of 75 cents per square foot for building subsystems.

Section 204. Modification and extension of the energy-efficient appliance credit (IRC section 45M). Current law provides a credit for the eligible production of certain energy-efficient dishwashers, clothes washers, and refrigerators. The credit for dishwashers applies to dishwashers produced in 2006 and 2007 that meet the Energy Star standards for 2007.

The bill extends the credit to appliances produced in 2008, 2009, and 2010 and updates the qualifying efficiency standards in accordance with the Energy Independence and Security Act of 2007.

The Listing Decision for the Polar Bear Under the Endangered Species Act

Posted by Brad Johnson Wed, 02 Apr 2008 14:00:00 GMT

Dirk Kempthorne has not confirmed attendance.

  • The Honorable Dirk Kempthorne, Secretary, U.S. Department of the Interior (INVITED)
  • Dr. Douglas B. Inkley, Senior Scientist, National Wildlife Federation
  • Kassie R. Siegel, Director of the Climate, Air, and Energy Program, Center for Biological Diversity
  • William P. Horn Esq., Birch, Horton, Bittner & Cherot

Drilling for Answers on Oil and Gas Prices, Profits, and Alternatives

Posted by Brad Johnson Tue, 01 Apr 2008 16:00:00 GMT

On Tuesday, April 1, 2008, Chairman Edward J. Markey (D-Mass.) will bring top-level executives from the five largest oil companies to discuss the current state of oil and gas prices, oil company profits, and the need for clean, renewable fuels to ease demand for oil and cut global warming pollution.

ExxonMobil reported record profits of $40.6 billion in 2007, and the other top four oil companies like BP and Shell made billions more. These same companies are fighting to keep $18 billion in tax breaks that Congress is attempting to shift towards renewable energy incentives for wind, solar, biomass and other climate-friendly sources. The House recently passed the Renewable Energy and Energy Conservation Tax Act of 2008, but President Bush and the top oil companies are fighting to defeat the measure in the Senate.

  • Mr. J. Stephen Simon, Senior Vice President, Exxon Mobil Corp.
  • Mr. John Hofmeister, President, Shell Oil Company
  • Mr. Robert A. Malone, Chairman and President, BP America, Inc.
  • Mr. Peter Robertson, Vice Chairman, Chevron
  • Mr. John Lowe, Executive Vice President, ConocoPhillips
12:11 Markey On April Fool’s Day, the biggest trick is being played on American consumers.
  1. The poorest Americans are currently spending 10% of their income on gasoline. The companies should spend 10% on renewables and biofuels.
  2. The companies should support renewable legislation.
  3. The Administration should stop filling the Strategic Petroleum Reserve.

The American people deserve answers.

12:12 Sensenbrenner Due to some of the highest gas taxes in the nation, my constituents pay some of the highest gas prices. It’s not surprising that gas and oil prices are going up. Demand is going up. Countries like China and India have demand growing well past traditional needs. Last week we heard the big impact the oil and gas companies have on the economy. They create good jobs and their R&D creates more jobs. It’s my hope they will bring new energy sources online. Unfortunately many places are unstable like Nigeria. These executives know what the future holds. I too believe that energy diversity must be a key part of energy policy. Oil and gas must play a dominant supply role for the forseeable future.

12:16 Blumenauer I look forward to hearing the executives ideas on how to get more renewable power. I look forward to finding what subsidies are necessary. I’m interested at what point an industry becomes sufficiently mature that it no longer needs taxpayer help and what parts do need support to be profitable. I personally believe we should put scarce taxpayer resources into a renewable sustainable future.

12:19 Shadegg (R-Ariz.) I think it’s important for all Americans to understand today’s very high oil prices. I am extremely interested in this issue. There is a sad lacking of basic economic understanding in the Congress and nation at large. I have tried to encourage further construction of refining purposes without much luck. If you look at the issues of both supply and demand, there are problems with both. There are known areas of supply but for various political reasons we are not allowed to go there. China has moved quickly towards becoming a developed nation. The result is not surprising—a spike in the cost of oil and gasoline. U.S. oil companies control less than 10% of oil reserves. Obviously we have a tremendous interest in exploring alternative energies.

12:22 Inslee (D-Wash.) I think that the public sentiment is not that Americans don’t understand supply and demand, and demand from China and India are going up. They don’t understand why you take an extra $18 billion out of their pockets on April 15. Secondly, Americans know that we have to wean ourselves off of oil and gas, we’re seeing a very small investment in clean renewable energy. I won’t ask for your home phone numbers.

12:25 Walden (R-OR) I share the concerns you’ve already heard. I’m hearing a lot from my constituents, farmers and ranchers. I’m a big supporter of renewable energy. I bought two hybrids. How do we meet the oil and gas needs of today in America, and how do we build a renewable energy industry? The price of oil is tied to the value of the dollar, as well. How do we solve the problem? How do we fix the problem so that we’re energy independent so that we can grow out of an oil economy?

12:28 Larson (D-Conn.) The laws of supply and demand are completely broken. I’d like to know if speculators are driving up the cost. Inasmuch as you receive $107 billion anually in taxpayer dollars.

12:29 Miller (R-Mich.) This committee was formed to address the question of climate change. We should take a good look in the mirror. We’ve done nothing as Congress to develop ANWR or offshore, and we’ve regulated prices up. Our domestic auto manufacturers have borne the brunt. Many other industries are responding as well. The oil companies continue to reap huge benefits. Many other industries have been asked to help us solve environmental problems. You are in the position to advance new and cleaner technologies. I believe you’re going to see a backlash from your customers. The backlash from this Congress could go farther than rolling back tax breaks in the face of combined profits of $123 billion last year alone.

12:32 Cleaver (D-Mo.) We hear over and over again, what are you going to do about high gas prices?

12:34 Sullivan (R-Ok.) One of the biggest concerns I heard was about food prices going up because of ethanol. ConocoPhillips is in my district. I get tired of hearing people saying Big Oil, Big Oil. I do want to hear about what you guys have to say about what’s going on.

12:35 Hall (D-N.Y.) As we all know, the price of oil has been rising at a dizzying pace. Today the average price of gas is $3.29. In New York, the cost is over $3.40. President Bush may not have known about the concern that gas would reach $4 a gallon, but Americans know. Since 2002 the combined profits of the five largest companies has quadrupled. During this hearing we’ll hear a lot trying to explain them away. Something is wrong and we need to fix it. I’m encouraged that some witnesses have expressed support for a carbon reduction plan.

12:38 Blackburn (R-Tenn.) I hope we will benefit from your expertise and insight. I hope we won’t try to place blame. We have placed new regulations, new burdens, and it seems we have not gotten the results we want. For every one dollar the price of gas goes up, that’s $600 out of the budgets of an American family. There are some who would like to place blame on you and place more taxes on you, would it place this nation at risk on more unfriendly foreign sources of oil?

12:40 McNerney (D-Calif.) Chevron is in my district. All companies must show profits and benefits to their shareholders. Oil prices are up, profits are up, and there’s clear evidence that the earth’s atmosphere is warming. I’m hoping to understand your perspective on this. I don’t believe the oil and gas industry should be at odds with the renewable industry. We know that progress is being made, by Chevron for example.

12:42 Solis (D-Calif.) I don’t intend to lay blame on you specifically. The price of gasoline in my district is upwards $3.69 a gallon, over $4 for diesel. Many of my constituents are truckers for the Port of Los Angeles. Why can’t those profits go into renewable energy and fuels and creating green-collar jobs? I’m just asking you to please step up to the plate. The suggestions I don’t want to hear for more drilling off our coast and opening up old refineries. Please keep in mind the constituents we represent.

12:44 Herseth-Sandler (D-S.D.) The average price for a barrel of oil in January ‘02 was $20 a barrel. Price volatility alone seems to me dictate is fuel diversity. One solution seems to me is biofuels if we put the proper systems in place. It has been shown that it is energy prices involved in transporting and processing food that affects food prices far more than the cost of corn and wheat. For those of you that don’t represent agriculture districts, most of our policies only kick in when prices are low. We should do that with other commodities.

12:48 Simon (Exxon) The world’s economy runs on energy. Because energy is so important, all of us must engage in an open debate. First, our earnings, though high in absolute terms, need to be understood in context. Second, stable tax policies are critical. Third, all reliable and economic forms of energy are needed. But renewables must not detract from the development of oil and gas. The oil and gas earned about 8.3 cents per dollar of sales, near the Dow Jones average of 7.3 cents per dollar of sales. In 1980, crude oil prices reached record prices. Many were predicting oil would reach 200 dollars in today’s prices. But they were wrong. Our industry requires investments that take decades. Over the next five years ExxonMobil intends to invest over $125 billion.

Regarding taxes: while our worldwide profits have grown, our worldwide taxes have grown more. Over the last five years, Exxon’s total tax bill exceeded our earnings. ExxonMobil’s effective tax rate in 2007 was 40%. The market is the most effective means of maximizing supply. Raising taxes on oil and gas production will likely lead to less alternative energy production, not more. Continuing to provide Americans with the energy they need is a challenge Exxon employees are ready to meet.

Hofmeister (Shell) We just had a nationwide dialogue on energy security. I agree we need an energy project on the scale of the Manhattan or Apollo Project. Developments in the financial market contributed to the rising prices. U.S. energy resources are unavailable. What is the energy supply-demand outlook? It is sobering. Demand is increasing unrelentingly. U.S. supply has fallen for thirty years because the U.S. government puts supply off limits. Shell is making significant capital investment. We spent $25 billion last year and will spend $28-$29 billion this year on capital investment. Shell is the world’s largest blender of biofuels. Shell has 11 wind projects. Shell is a leader in thin-film solar. We have proprietary coal-to-liquids technology. Shell continues to be an industry leader in deep-water Gulf of Mexico. Shell has a worldclass manufacturing organization. In oil sands, oil shale, Shale is developing the infrastructure to develop them in the U.S. and Canada. In 2006, Congress opened new areas in the Gulf of Mexico to development. We need all forms of energy including conservation. I commend Congress for including higher fuel economy. We support a cap-and-trade program with sectoral approaches.

Robertson (Chevron) I will address three issues: rising oil prices, energy supply. Three years ago we sent a letter foreshadowing the issues we face today of volatility and high prices. All Americans feel the pain of $100 oil. The world is consuming oil at an ever-increasing rate. There are a billion people enjoying our standard of living. We need your help to open the 85% of the Outer Continental Shelf off limits. There are 17 boutique fuels across the country. The time for action is now. In the last 5 minutes, the world has consumed 35 million gallons of gas equivalent.

Lowe (ConocoPhillips) ConocoPhillips supports developing traditional, renewable, and alternative forms of energy. We cannot attain an alternative energy economy in a few short decades. We must also develop the ability to use fossil fuels in cleaner forms. Our reinvestments exceeded our income. We have $15 billion in investments in 2008, including a major investment in the Canadian oil sands. We are increasing our refining capacity. Although renewable is not a core part of our portfolio, ethanol represents 5% of our gasoline volumes. We are working to produce biofuels from agricultural waste. We are evaluating opportunities to invest in solar and wind power. We have developed proprietary technology to convert coal into clean-burning natural gas. Two years ago, we formed a unique relationship with Tyson to create biofuels from animal fats. The House is blocking us from getting the biodiesel incentive. It is critical that incentives be feedstock and technology neutral. Hopefully we can move beyond today’s adversarial relationship. The U.S. is engaged in a global race. Unless our domestic companies are allowed to compete on level ground, we will undermine U.S. energy supply.

1:10 Malone (BP America) We’re the nation’s largest producer of domestic oil and gas. We expect to spend $30 billion in the next five years to expand natural gas from the West, to develop the Gulf of Mexico, to produce oil from the North Slope of Alaska. We expect to have 1000 MW of wind power on line. We’re one of the largest blenders of ethanol in the nation. We will invest $500 million in non-foodcrop ethanol. We can work with this Congress to move toward greater energy security. BP in America is working hard to diversify American energy supply. Our investment across the entire energy spectrum is huge. During 2007 we invested $750 million on alternative energy. Even with energy efficiency and renewable energy, the U.S. will consume more fossil fuels than it does today. U.S. energy policy must address both supply and demand. Taxing one form of energy to invest in another will reduce our ability to keep up with U.S. demand. On the demand side we have to drive up energy efficiency.

1:15 Markey Last year ExxonMobil reported $40 billion in profits and $7.5 billion in executive compensation, but I can’t see more than $100 million in renewables in the next ten years.

Simon When you go back to 2000 we as a corporation recognized that we had a huge challenge in front of us in keeping up with demand while balancing the risks of climate change. We looked at every facet of renewable energy. Our best scientists looked at it in a fundamental basis, a well to wheels analysis.

Markey How much have you invested in renewable energy in 2008?

Simon I will get to that.

Simon Recognizing that we needed to do something of a great magnitude, we initiated the global climate project at Stanford University. Putting more money into something won’t necessarily…

Our analysis is that we are not going to be able to meet the challenge. We need to leapfrog current technology.

Markey We don’t have time. For the poor in America, 10% of their income is going to oil. You’re doing a partnership to begin to think about doing something.

Simon To have an impact it’s going to take breakthroughs. About 70% of the price of gas is crude oil. We can moderate demand.

Markey You can’t be nickel and diming renewables at Exxon, and recording record profits, and fighting our efforts to put the billions into renewable R&D.

Simon The current technologies don’t have an impact.

Markey That’s just a policy of tax breaks for companies and tough breaks for consumers. With all respect to Stanford, other companies here are investing billions in renewable energy.

1:22 Sensenbrenner We don’t have the power to repeal the law of supply and demand. Demand is up because of China and India. Supply is restricted because we can’t build refineries. Our low interest policy to prevent the housing market from tanking is pulling down the dollar. What do you think is the most important policy to increase supply?

Simon Open access to supplies that are currently off-limits.

Hofmeister Short-term, medium, and long-term strategies. We will suffer enormously from a continuing shortage of hydrocarbons.

Robertson A message of efficiency is most important, then open up off-shore development.

Lowe We need more access in the United States.

Malone In Canada we have the Saudi Arabia of North America.

Sensenbrenner If you had the supply, would you have the refining capacity?

Malone Two of our projects are to expand our refineries with access to Canadian crude. We can expand our refineries.

Lowe We’ve encountered significant difficulty in permitting these projects.

Robertson The U.S. market has been has been about flat. We have the refining capacity.

Hofmeister We have the refining capacity to meet future demand.

Simon We don’t think we’ll have any issues.

1:27 Blumenauer Mr. Simon, please submit to the committee the accounting assumptions to say you’re spending more in taxes than income. Your testimony referenced that we’re 5% of the world’s population and consuming 20% of the world’s supply. Anyone think this is sustainable?

Simon I think we will be able to meet increase in demand.

Blumenauer Can we not come close to Europe and Japan in per-capita use in the next ten or 15 years?

Robertson Absolutely.

Blumenauer Some of you more aggressively than other recognize that the future is going to be weighted toward renewables. At what point the mature part of your business, the oil production, is mature enough that we can focus the subsidy on the emerging parts, like wind and solar?

Hofmeister Your timeframe of 10 to 15 years is too short. We don’t have the benefits of dense housing and mass transit systems. The issue that is most troubling in terms of 199 withdrawal is punishing 5 companies by name. We are mature already. We are successful as a company. Wind and solar have lots of obstacles to overcome. There is not enough turbine manufacturing, not enough high-transmission lines.

Blumenauer We may not have 10 to 15 years. I suspect with your help I think we could put these pieces together.

1:34 Shadegg As a result of a loophole of U.S. tax code where we created an incentive to create biodiesel and add one gallon of biodiesel to 99 gallons of conventional diesel, you get a $1 gallon subsidy, known as “splash and dash.” Can you justify that?

Simon Our policy is that renewables should not be subsidized.

Robertson We haven’t taken advantage of it and we don’t need it.

Shadegg Mr. Simon, can you tell me what percentage of the world’s biggest oil companies are owned by foreign governments?

Simon Only about 2 of the top 13 oil companies are international. National companies control 80% of supply.

Shadegg I suspect there are areas that are less sensitive and others. Is there a correlation between reserves being locked off and the decline in production?

Robertson The first thing that would make sense to do is to do a seismic survey of the entire outer continental shelf. It’s pretty clear there are going to be some areas that are prospective and some that are not.

Hofmeister From past surveys, the API estimates there are 100 billion barrels of supplies in non-sensitive areas.

1:39 Inslee I want to commend BP for meeting their Kyoto internal targets. Did any of you participate in the Dick Cheney energy task force?

Malone Yes.

Inslee Could you make your related documents available to the committee?

Malone Yes.

Inslee We need to make real investments in the renewable energy revolution. You’re investing less than 0.5% revenues on renewables.

Inslee Considering we have to cut our greenhouse emissions by 80% by 2050, would you agree

Simon The assumption that that’s required… the fact is we are going to have gas and oil and coal and it’s going to constitute about 80% of the energy equation.

Inslee If Exxon continues to only have 0.5% of its revenues we’re heading for a climate catastrophe.

Simon I don’t agree.

Inslee Where’s the investment going to come from, the oil fairy?

Inslee I was at Stanford recently and very excited by a report from Dr. Jacobson. The U.S. could replace all vehicles with electric vehicles powered by wind and solar electricity. With your pathetically small research budget, we’re not going to meet.

Simon I invite you to look what we’re doing with our climate project.

Inslee We did ask your company what investments they’re making and they refused to give it to us.

1:44 Walden With your record high profits have you given any thought to lowering the price of gasoline?

Hofmeister The global price of crude is the real issue. The global price of crude will not go down unless supply go up.

Walden Or demand goes down. And I fear demand is going down not because of conservation but because of hard economic decisions.

Robertson Ethanol prices have been pretty volatile but it’s a pretty small price of the gasoline. 70% of the price of gas is oil, 15% is taxes.

Walden I’m interested in your partnership on woody biomass. Are there any breakthroughs in cellulosic development?

Robertson The thing that’s important is that they’ve got a huge amount of forestry. We’ve got a lot of knowledge on fuels. We’re convinced we can come up with something together. Different places trying different kinds of feedstocks.

Walden I also serve on the Energy Committee. Can you talk about the Alaska pipeline?

Malone We will be done on schedule and maybe ahead of time.

1:50 Larson Your primary responsibility is to the shareholders of your company. Is that fair? And when we make decisions, we do them based on the citizens we’re sworn to serve. In my district the system of supply and demand has gone amok. We’ve seen speculation, causing the artificial rise in the price of oil.

Simon When you look at the fundamentals, the price should be $50-55 a barrel of oil. The weaker dollar, the geopolitical risk, and speculation.

Larson What would you do about speculation?

Robertson The main thing are demand, supply, the dollar, we’re part of a world system.

Larson We’re responsible to our citizens. What are we giving you a tax break of $107 billion?

Robertson Our shareholders only benefit if our customers are satisfied. We’re spending as much as we can to increase energy for the U.S. and the rest of the world.

Miller We are in the global market for energy. We look to Canada and see all the oil sands there. What percentage of the foreign supply comes from Canada? What’s the oil sands potential? I hear China is trying to lock down a contract.

Lowe ConocoPhillips is the largest landholder in the Canadian oil sands. We have a number of very good multi-billion-dollar projects. Ultimately Canadian oil sands can supply 20% of U.S. needs.

Robertson The U.S. uses 20 million barrels a day. Canada is the largest importer, Mexico the next largest. Oil sands could build up over 10-15 years.

Malone We’re going to expand our Midwest refineries to handle Canadian heavy crude.

Hofmeister The oil sands are successful because Canada has established a national energy strategy. Shell has been working to develop the oil shale of Utah and Colorado.

Miller Congress doesn’t always do well on national policy. We’re going to end up bankrupting the domestic auto industry because of the standards we’ve placed on them. What about China?

Robertson China is investing around the world just like we are. Most of the oil in Canada is going to come south to the United States.

Simon We have to be careful about cutting ourselves off from the supply of heavy tar sands.

2:01 Cleaver My father never earned more than $25,000 a year. I’m meeting people like that soon in my coffee with a Congressman. Mr. Simon, what can I say to them to understand how Lee Raymond received a $400 million severance package, $141,000 a day.

Simon I would hope that’s behind us now. It’s in the past.

Cleaver Everything we can talk about is in the past.

Simon There’s a misconception how much is due to the past, current, and future.

Cleaver So that’s what I can tell them?

Simon When you break it down and look at that pay package you would consider that was competitive.

Cleaver This is a rhetorical question, but what ever happened to shame? Are any of you upgrading or unplugging old wells?

Robertson We’re certainly looking at it.

Cleaver We get the impression the oil industry is struggling.

Hofmeister We struggle for access. We’re looking for the ample reserves. We could spend a lot of money with low return in existing fields.

Cleaver All of your companies are doing well, right?

Robertson We’re working durn hard. Life is not easy.

Cleaver Your stock prices don’t make it sound like a struggle.

Robertson I didn’t say it was a struggle, I said we’re working hard.

2:07 Sullivan I believe in global warming, that plays a part. You want to displace international supply with domestic supply. I want to see us move away from gas and oil eventually. In the short term you said 15-20 years to develop this technology. Oil and gas is still going to be very much part of this equation.

Hofmeister I think it’s important for Americans to understand the scale of the problem. 10,000 gallons of gas is consumed an hour. 20 railcars of coal are burned a minute. The scale of massive amounts of hydrocarbons consumed is absolutely necessary. What is slowing the conversion is the lack of commerciability of alternatives.

Simon If you look at the IAEA fossil fuels will make up 80% of the economy by 2030.

Robertson In 1999 we closed the books and our profits were zero.

2:13 McNerney With varying degrees of emphasis you’ve indicated you have investments in renewable and efficiency. What’s your long-term view?

Robertson We agree with the 2030 outlook of 85% coming from fossil fuels. The biggest opportunity comes from energy efficiency. We can get 30% reduction in use of energy. The opportunity for us all to become a lot more energy efficient, in leading the nation, that’s the biggest source of energy.

McNerney Do you think we’ve reached the maximum output of oil?

Hofmeister I don’t ascribe at all to peak oil theory. The idea of moving from 85 million barrels/day to 110 million barrels/day is in the focus of the world’s oil companies.

McNerney What’s the bottleneck?

Hofmeister National companies limit access. The U.S. is the best example of having lots of resources that are locked up. The peak oil theory makes no remarks with respect to oil sands and oil shale. I agree that by 2030 we’ll still be a hydrocarbon economy.

2:17 Blackburn Our nation has made choices and those choices have consequences. Some unwise choices 20, 30 years ago are bearing consequences. When a consumer buys a gallon of gas and they’re paying $3.29 they’re paying 69% for crude and 13% for tax and 18% for refining/distribution/marketing. So the government gets the most out of a gallon of gas?

Simon That’s right.

Blackburn We have to find out how we’re going to deal with this. What I would like to hear from you your short, medium, and long-term strategies in the form of a one-sheet. We need a comprehensive strategy that takes into account supply and demand. What do you think of windfall profit taxes?

Hofmeister I think windfall profits have been tried before and that reduces supply.

2:22 Solis The risk of global warming.

Malone We made the decision seven years ago we had to address global warming. We knew our business emits greenhouse gases. There is a missing link now. We still don’t have any way to price and market carbon in this country. If you can’t sequester it, there’s no market mechanism to move forward.

Solis Why have you not developed any leases?

Simon We’re developing as fast as we can.

Hofmeister Leases are about 10 years time. Sometimes 10 years isn’t long enough.

Solis How do you explain the profits?

Hofmeister The profits are cumulative around the world.

Solis So the obstacle is the market.

Hofmeister If we had the confidence that there were more leases, we would do more investment.

Robertson Today Chevron’s the largest geothermal company in the world.

2:30 Herseth-Sandlin Would you still blend 8% if there wasn’t a RFS?

Simon If there were not a renewable fuel standard we would not do that.

Robertson We’re trying to go up to 10%. We do think going about 10% would impact the food supply.

Herseth-Sandlin Do you know the impact of fuel transport vs. ethanol demand on food prices?


Shell and ConocoPhillips and BP are test-marketing E85. Malone: We have limited E85.

2:34 Hall I wanted to comment that the actions of Congress have not gotten results. The attempt by the House to roll back tax breaks has failed to get out of the Senate. I have a constituent who bought a flex-fuel vehicle and had to be told there are only two E85 pumps in New York.

Simon We do not make biofuels so we cannot warrantee it.

Hofmeister We are test-marketing E85 in Wisconsin but the results are very poor.

Robertson Some have.

Lowe ConocoPhillips are testmarketing it. Consumer acceptance is low.

Malone We’re very concerned by the UL listing on the pump.

Hall I’m burning 20% biodiesel for my home heating. I’m sure you’re all familiar with Fischer-Tropsch process.

Hofmeister Our work has been on solid materials and liquefaction of natural gas.

Robertson I’m not aware of a system able to take CO2 out of the air.

Hall If you’re making two gazillion dollars of profit in a time period. Would you as a patriotic move use some piece of your advertising budget that people should conserve?

Shell and Chevron advertising does a lot of that.

Simon We’re proponents of people using fuel efficiently.

2:41 Sensenbrenner I’m not sure that the committee can suspend by unanimous consent the House rule that prevents other members from participating in the committee.

Markey Under House custom any House rule can be waived by unanimous consent.

Sensenbrenner I object.

Stupak If you were going to object why didn’t you object three hours ago?

Sensenbrenner I move to strike that remark. This wasn’t cleared with the minority.

Markey I apologize for taking your time.

Stupak No need to apologize, what goes around, comes around.

Markey There should be a commitment that you should make. We will not be able to solve this global climate challenge unless you do so. Similarly, consumers will not be able to do this without your focused attention. It is your responsibility to deal with this in a responsible fashion. What you do is up to you. This is the first of many hearings you’re going to have. I am asking you each to deal with that issue. We thank you for your testimony. The hearing is adjourned.

Getting Royalties Right: Recent Recommendations for Improving the Federal Oil & Gas Royalty System

Posted by Brad Johnson Tue, 11 Mar 2008 14:00:00 GMT

The Subcommittee will review recommendations from policy experts, the Government Accountability Office and the Inspector General’s office for improving the Federal oil and gas royalty system in light of the recent report to the Minerals Management Service’s Royalty Policy Committee entitled “Mineral Revenue Collection from Federal and Indian Lands and the Outer Continental Shelf.”


Panel 1

  • Mr. Earl Devaney, Inspector General, Department of the Interior
  • Mr. David Deal, Vice Chair, Royalty Policy Committee, Department of the Interior
  • Mr. Frank Rusco, Acting Director, Natural Resources and Environment, General Accounting Office
Panel 2
  • Hon. C. Stephen Allred, Assistant Secretary, Land and Minerals Management, Department of the Interior
  • Mr. Randall Luthi, Director, Minerals Management Service
  • Mr. Larry Finfer, Deputy Director, Office of Policy Analysis, Department of the Interior
  • Ms. Linda Stiff, Acting Commissioner, Internal Revenue Service
  • Mr. Dennis Roller, Royalty Audit Section Manager, Office of the State Auditor, North Dakota

Senate Not Open to Oil-For-Renewable Package Reconciliation

Posted by Brad Johnson Wed, 05 Mar 2008 14:12:00 GMT

Despite earlier reports that the Senate was considering inclusion of the oil-for-renewable package (H.R. 5351) in its budget reconciliation, as the budget markup begins today, the filibuster-proof strategy has been taken off the table.

The National Journal reports:
While a Senate budget resolution is going to set aside $13.4 billion over five years for these renewable and efficiency credits – some of which expire this year – it merely signals that the issue is one of the priorities for Senate Democrats and does not forward debate over how to pay for those credits. . . a spokesman for Reid said he will not resurrect an energy tax debate until after lawmakers come back from the upcoming two-week Easter recess.

The Journal also reports that Sen. Maria Cantwell (D-Wash.) has been tasked by Majority Leader Reid to attempt to find further Republican votes to establish a veto-proof majority for the package.

CQ Politics points to Sen. Landrieu as objecting to using reconciliation:
Sen. Mary L. Landrieu , D-La., for example, is against using the process to pass renewable-energy tax breaks if they lead to tax hikes on oil and gas companies.

Sen. Landrieu cast a deciding vote against the oil-for-renewable tax package during the 2007 energy bill debate.

National Journal
The decision by Senate leaders not to pursue a filibuster-proof budget reconciliation plan removes one option for moving billions of dollars of renewable energy and efficiency tax breaks funded by repealing incentives for oil and gas companies.

While a Senate budget resolution is going to set aside $13.4 billion over five years for these renewable and efficiency credits – some of which expire this year – it merely signals that the issue is one of the priorities for Senate Democrats and does not forward debate over how to pay for those credits.

A reconciliation bill would have sent detailed instructions to committees on how to pay for that spending and would have been immune to a filibuster.

The budget resolution also includes $3.5 billion in discretionary funding for energy above President Bush’s FY09 request, which Senate Budget Chairman Conrad touted as “a very big increase; I think the biggest increase in more than 30 years.”

Senate Democrats are trying to overcome Republican opposition to scaling back billions in incentives for oil and gas companies to pay for the popular renewable and efficiency credits. Democrats in December fell one vote short of the 60 needed to overcome a filibuster of a $21.8 billion proposal that reduced oil and gas incentives by about $13 billion.

A politically problematic $18 billion House-passed renewable energy tax proposal is pending, but few are optimistic that it could become law given a White House veto threat. This is leading to some brainstorming on other means of getting these credits extended quickly.

Majority Leader Reid has tasked Sen. Maria Cantwell, D-Wash., with helping find another Republican vote or two. Cantwell, who pushed for a one-year $5.5 billion renewable and efficiency tax package as part of a failed Finance Committee economic stimulus plan, said a similar smaller package should be considered. “There’s nothing preventing us from looking at the bigger package – see what the president does – but still work toward a smaller package too,” she said.

Cantwell said “the challenge is to still try to save investment in ‘08,” and extend the tax incentives within the next month or so.

This is the basic message of a broad coalition of businesses, renewable energy groups, environmentalists, labor unions and others who are taking advantage of an international renewable energy conference in Washington this week to do some cohesive lobbying to extend these credits by the end of the month.

But a spokesman for Reid said he will not resurrect an energy tax debate until after lawmakers come back from the upcoming two-week Easter recess.

Several industry officials say they are not requesting that Congress follow a particular strategy for quickly extending the renewable and efficiency incentives.

“We basically said Congress should figure this out,” said Dan Reicher, former assistant Energy secretary for energy efficiency and renewable energy under President Clinton and now director of climate change and energy initiatives at

“We have tried to stick to a pretty simple approach – extend the credits quickly and extend them for a long period of time.”

But the political problems associated with repealing the billions in oil and gas incentives means the solution to getting an extension through fast is potentially undefined.

“The answer is, you need some new and original thinking here,” said Marchant Wentworth, legislative representative for the Clean Energy Program at the Union of Concerned Scientists.

While Cantwell has talked about doing a smaller package to gain support and possibly avoid a veto threat, Wentworth cautioned that there does not appear to be a magic number to achieve that.

“The question we all face is, are there new votes that you would get? These are leadership-driven; it’s unclear to me that lowering the incentives gets you anything,” he said.

In the meantime, a wide variety of groups and companies – including retail giant Wal-Mart, the Real Estate Roundtable, Dow Chemical and DuPont – are targeting congressional leaders and several Senate Republicans to vote for extending the credits regardless of whether it affects oil and gas company incentives.

Among Republicans being targeted are Sens. John Ensign of Nevada, John Sununu of New Hampshire, Ted Stevens and Lisa Murkowski of Alaska, Arlen Specter of Pennsylvania and Richard Lugar of Indiana.

Lugar and Murkowski voted against the filibuster in December. Renewable energy groups might also get a rare chance to lobby Bush personally when he speaks today at the 2008 Washington International Renewable Energy Conference.

Next Steps on Oil-for-Renewable Package

Posted by Brad Johnson Tue, 04 Mar 2008 17:02:00 GMT

Upon the House passage of the oft-stymied oil-for-renewable tax package as a standalone bill (H.R. 5351) last week, Ben Geman of E&E News reported on a possible mechanism for moving the bill through the Senate with a simple majority:
Senate Democrats are eyeing a filibuster-proof budget bill as a vehicle for energy tax provisions that have narrowly failed to win the 60 votes needed to cut off debate, several lawmakers said yesterday.

Energy taxes are a “candidate to be considered in [budget] reconciliation,” Budget Chairman Kent Conrad (D-N.D.) told reporters. “I think we have to look at things that reduce our dependence on energy.”

The oil-for-renewables package, which faces the threat of a Bush veto, received resounding support from a broad coalition of industry, investors, and environmental organizations in a press conference today on the first day of the Washington International Renewable Energy Conference. President Bush is scheduled to offer the keynote address to the convention tomorrow.

Pelosi, Bush Battle on Oil-For-Renewables Tax Package

Posted by Brad Johnson Thu, 28 Feb 2008 20:33:00 GMT

The Democratic House leadership sent a letter today challenging Bush to sign the House oil-for-renewables tax package (H.R. 5351) passed by their chamber yesterday.
Promotion of the renewable energy industry is the goal of the Washington International Renewable Energy Conference, which your Administration hosts next week. The conference offers a remarkable world platform to support a fiscally responsible commitment to these industries and technologies and the jobs they will produce. We urge you to reconsider your previous opposition to fiscally sound incentives for American renewable energy, and lend your support to this historic legislation in time for this occasion.

At today’s press conference, President Bush parried a question about his threatened veto of bill (after admitting ignorance about the likely $4 gallon gas this spring).

He claimed the cost-neutral bill would “cost the consumers more money and we need more oil and gas being explored for, we need more drilling, we need less dependence on foreign oil.” With respect to renewable energy, he discussed cellulosic ethanol and other biofuels, nuclear energy, and carbon sequestration, but not solar, wind, or energy efficiency.

QUESTION: Mr. President, back to the oil price tax breaks that you were talking about a minute ago.

Back when oil was $55 a barrel you said those tax breaks were not needed, people had plenty of incentive to drill for oil. Now the price of oil is $100 a barrel and you’re planning to threaten a plan that would shift those tax breaks to renewables. Why, sir?

BUSH: I talk about some — some — of the breaks. This generally is a tax increase. And it doesn’t make any sense to do it right now. We need to be exploring for more oil and gas.

And taking money out of the coffers of the oil companies will make it harder for them to reinvest.

I know — they say, “Well, look at all the profits.” Well, we’re raising the price of gasoline in a time when the price of gasoline is high.

Secondly, we’ve invested a lot of money in renewables. This administration has done more for renewables than any president.

Now, we’ve got a problem with renewables, and that is the price of corn is beginning to affect food — cost of food and, you know, it’s hurting hog farmers and a lot of folks.

And the best way to deal with renewables is to focus on research and development that will enable us to — to use other raw material to produce ethanol.

I’m a strong believer in ethanol. This administration’s got a great record on it.

But it is — I believe research and development’s what’s going to make renewable fuels more effective.

Again, I repeat: If you look at what’s happened in corn out there, you’re beginning to see the food — the food issue and the energy issue collide. And so to me the best dollar spent is to continue to deal with cellulosic ethanol in order to deal with this bottleneck right now.

And secondly, the — yes, I said that a while ago — on certain aspects.

But the way I analyze this bill is it’s going to cost the consumers more money and we need more oil and gas being explored for, we need more drilling, we need less dependence on foreign oil.

And as I say, we’re in a period of transition here in America, from a time where we were — where we are oil and gas dependent to hopefully a time where we got electric automobiles, and we’re spending money to do that; a time when we’re using more biofuels and we take huge investments in that; a time where we’ve got nuclear power plants and we’re able to deal with the disposal in a way that brings confidence to the American people so we’re not dependent on natural gas to fire up our — you know, a lot of our utilities; and a time when we can sequester coal.

That’s where we’re headed for but we’ve got to do something in the interim. Otherwise we’re going to be dealing, as the man said, with $4 gasoline.

And so, that’s why I’m against that bill.

House Debating Oil-For-Renewables Package Today

Posted by Brad Johnson Wed, 27 Feb 2008 17:11:00 GMT

From the beginning of her tenure, Speaker Nancy Pelosi (D-Calif.) has attempted to pass legislation cutting billions in tax breaks and royalty payments to oil and gas companies to invest in renewable energy and energy efficiency. The legislation has died twice by a single vote in the Senate – in December as part of the energy bill (H.R. 6), and three weeks ago as part of the economic stimulus legislation (H.R. 5140).

House leadership announced plans to immediately reintroduce the legislation as a standalone bill, named the Renewable Energy and Energy Conservation Tax Act of 2008 (H.R. 5351).

Debate on the bill is now taking place, with a final vote scheduled for some time after 3 PM EST.

Update: HR 5351 passed by a roll call vote of 236-182. 17 Republicans joined the Democratic majority; 8 Democrats (Barrow, Boren, Cuellar, Gene Green, Lampson, Melancon, Ortiz, Rodriguez) voted against passage.

CRS summary:
Extends: (1) the tax credit for production of electricity from renewable resources through 2011; (2) the energy tax credit for solar energy and fuel cell property through 2016; (3) the special rule for treatment of gain from electronic transmission transactions by certain electric utilities through 2009; (4) the tax credit for residential energy efficient property expenditures through 2014; (5) the tax credit for alternative fuel vehicle refueling property expenditures through 2010; (6) the tax credit for biodiesel and renewable diesel used as fuel through 2010; (7) the tax credit for nonbusiness energy property expenditures through 2009; and (8) the tax deduction for energy efficient commercial buildings through 2013.

Allows new tax credits for: (1) investment in new clean renewable energy bonds and qualified energy conservation bonds; and (2) the production of plug-in hybrid motor vehicles, cellulosic alcohol fuel, and electricity from marine and hydrokinetic renewable energy sources.

Revises the definition of “passenger automobile” for purposes of the limitation on depreciation deductions.

Allows a tax exclusion for bicycle commuting reimbursements.

Revises certain tax incentives for investment in the New York Liberty Zone.

Revises tax credit amounts for certain energy efficient household appliances produced after 2007.

Allows a five-year recovery period for the depreciation of qualified energy management devices.

Places limits on the tax deduction for income attributable to the domestic production of oil, natural gas, and any related products.

Revises tax rules relating to foreign oil and gas extraction income and foreign produced fuel used or sold outside the United States.

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